Auxilium Shares Get Lift As Wait For FDA Approval Ends
February 03 2010 - 11:08AM
Dow Jones News
Shares of Auxilium Pharmaceuticals Inc. (AUXL) are up 11% after
the drug maker received Food and Drug Administration approval for
Xiaflex in treating a hand disorder late Tuesday.
The Malvern, Pa., biotech, has been waiting for an agency
decision since the Fall after getting the positive recommendation
of an FDA panel of outside experts in September. The initial target
date for the approval was prior to the panel, which added a level
of uncertainty to the timing of the agency's final decision for
both Wall Street and the company.
"We were set to go back in the second half of last year,"
Auxilium President and Chief Executive Armando Anido said in a
recent interview. After printing labels and making final
preparations, the company plans to launch the drug in late March
using about 100 sales representatives. In waiting for regulators to
make a decision, the company has been building inventory of
Xiaflex.
"At this point I think we are as ready as you can get," Anido
said.
Shares of Auxilium recently traded up 14% to $31.94 on more than
five-times is usual volume.
"We view Xiaflex as one of a handful of innovative, highvalue
biologics and expect AUXL shares to outperform as investor's gain
confidence in the drug's commercial success," analyst Eric Schmidt
with Cowen & Co., wrote in a note to clients.
Schmidt estimates U.S. sales of the drug being $30 million in
2010 and rising to $420 million in 2014.
Auxilium will sell the drug itself in the U.S., and its overseas
partner Pfizer Inc. (PFE) has already filed for approval in
Europe.
Auxilium already sells Testim, a topical testosterone gel, and
reported total revenue of $125.4 million in 2008.
Xiaflex, an enzyme that breaks down collagen, treats Dupuytren's
contracture, a buildup of collagen in the hands that can prevent
extension of the fingers.
The approval of the drug requires a post-approval plan for
evaluating and reducing any risk associated with the drug,
including a communication plan, medication guide, and providing
instructions for properly using the drug.
-By Thomas Gryta, Dow Jones Newswires; 212-416-2169;
thomas.gryta@dowjones.com